Xtraordinary Women Magazine February 2015

THE IMPORTANCE OF A MEMORANDUM OF INCORPORATION The Companies Act 71 of 2008 (“the Act’) defines the Memorandum of Incorporation (“MOI”) as a document, as amended from time to time, which sets out rights, duties and responsibilities of shareholders, directors and others within and in relation to a company. The MOI combines the previous memorandum of association and articles of association of a company into one document. The MOI represents a set of rules which company’s may accept, change or supplement to suit the particular needs of their company subject to the condition that all the provisions of the MOI is consistent with the provisions of the Act. The Act provides that: a) The MOI may include matters which are not addressed in the Act and any alterations of alterable provisions; b) The MOI must be consistent with the Act and is void to the extent to which it contravenes or is inconsistent with the Act itself; and c) Any provision of a shareholders agreement which is inconsistent with the Act or MOI is void to the extent of the inconsistency. Essentially the MOI could be seen as the shareholders control document which defines the company’s authority levels and the respective roles and rights of both the shareholders and directors. It is also seen to be a company’s internal code of corporate governance which confirms to third parties whether or not the company has any restrictive conditions such as Ring Fenced (RF). The MOI acts as the sole governing document of the company. In terms of Section 15 (6) of the Act, a company’s MOI and any rules of the company are binding between the company and each shareholder, between the shareholders of the company, between the © Meegan Henkeman-‐ Schoeman Tshaka Attorneys-‐ 2014

Xtraordinary Women Magazine February 2015 | Page 28